Posted On Monday, Oct 25, 2021
|Table of Contents
SIP Investment – Meaning
SIP Investment plans and benefits
SIP Investment Calculator
SIP Investment in shares
If you are an investor – New or seasoned, there is no way you have not come across the term SIP Investment.
Before we go ahead, we must all know what is the SIP Investment full form.
SIP means ‘Systematic Investment Plan’.
Mostly, new investors refer to it as an SIP investment plan, not knowing that the full form is itself a Systematic Investment Plan.
Now that we know the SIP Investment full form, we must also know the SIP Investment Meaning.
You see many a times, investors do not have a lumpsum amount to invest in the mutual funds of their choice.
But that does not mean an investor has to give up on his/her plan of investing in the same.
Here comes in the picture what we have already discussed - An SIP.
It allows investors to set aside a small sum that they can invest every month and invest the same in mutual funds of their choice on a regular basis.
This means, an amount that the investor wants to invest in a fund regularly, is deducted from his/her bank account on a set date every month, to be invested in a fund of choice.
When you choose an SIP investment plan, you are basically buying a particular number of units of a fund of your choice, based on the amount you invested every month.
The best part is that you do not need to worry about timing the markets when investing through an SIP, as you can very well benefit from averaging through investing in the bullish as well as bearish markets
This also instils a sense of financial discipline in new investors, which could help them in the long run.
So that was the SIP Investment meaning, which we hope is clear to you now.
Now it only makes more sense to know more about SIP Investment Plans.
SIP Investment Plans:
1. Regular SIP – A fixed amount goes out at pre-set intervals. The amount cannot be changed in the tenure the investor chooses.
2. Top-Up SIP – Allows investors to step up or increase the SIP amount on a periodic basis.
3. Flexible SIP – Gives investors the flexibility to change their investment amounts based on their individual financial conditions or the market trends.
These are some of the types of Systematic Investment Plans an investor should know about before taking the plunge.
Having said all that, there is one warning we must give to investors.
Please do not confuse SIP Investment in mutual funds with Sip Investment in shares.
SIP investment in shares is a completely different ball game.
We say this because in the case of an SIP you can have in a mutual fund, you are investing in a portfolio of different companies’ stocks.
But in case of SIP investment in shares, you must have the understanding of how to create a well-diversified portfolio of shares.
In short, SIP Investment in shares would require you to personally keep monitoring the investments.
But there are also quite a few SIP Investment benefits that you must know about when it comes to SIP investment in mutual funds.
SIP Investment Benefits:
1. Convenience: Helps one to invest in a disciplined and regular way, from the comfort of home.
2. Rupee Cost Averaging: You don’t need to be an expert. No need to time the market. When the market is low, you get more units and when the markets are on a high, you get less units. This in turn results in lower cost of investing, which is another benefit.
3. Compounding: Make the most of the power of compounding in the long run.
4. Begin with a low investment: You can begin investing in mutual funds with a SIP starting with as low as Rs 500 a month.
The above are the top SIP investment benefits.
Now that you know all this, there is one last thing we think an investor must know about.
SIP Investment calculator:
An SIP investment calculator is basically a simulation that allows investors to estimate the returns they can expect through the SIP investments that they make.
In simple words, SIP investment calculators give potential investors a heads up on what they can expect from their mutual fund investments.
An investor just has to enter the amount of investment they plan as an SIP, frequency of investment – monthly or quarterly, how long do they want to stay invested and the returns that they expect.
Now you know much more about SIP Investment, and we told you about sip investment full form, sip investment meaning, sip investment plans, sip investment benefits, sip investment calculator, etc.
So, if you want to start with a SIP investment plan, you can start with us right here.
The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.
Please visit – www.QuantumAMC.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.
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